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The insurance agent work-around: Buy insurance direct from the company.

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(Read caption) The main reading room of The New York Public Library is pictured in this December 2004 file photo. Between the local library and the internet, it’s easy to gain access to all of the information you would ever want about insurance policies, Hamm writes.

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In many ways, I feel the same way about insurance agents as I do about financial advisors.

In both cases, most of the people in the business are really good people. They’re out there doing what they can to make their customer’s situations better. One of the people I respected the most growing up was an insurance agent, in fact; he was one of the true pillars of the community.

In terms of what they actually do, most agents provide very solid advice to people who are unsure about what to do. They can help people dig through their financial situation and figure out their best moves. This can be particularly valuable for people who are uncomfortable without a guide to help them navigate their financial situation.

However, sticking only with agents can cut off your options a bit. Most large insurance houses sell policies directly to the public, bypassing local agents. In many cases (in my experience, it’s been most cases), the policies that the insurance houses sell have slightly better prices than what the agents are offering, though not in all cases.

Buying directly from the company does reduce the amount of assistance you get. You’re going to have to know what you’re doing and do the research on your own to get the right policies if you’re doing it yourself.

The reward for that move is usually lower insurance premiums. Even if that doesn’t turn out to be the case, at the very least you’re giving yourself more options for comparison shopping.

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The challenge, of course, is that you have to do all the homework yourself. You have to be able to find out about different policies, understand your own financial situation well enough to choose appropriate policies, and then go out there and get those policies.

Between the local library and the internet, it’s easy to gain access to all of the information you would ever want about insurance policies. There are countless books and websites that detail all of the information you’ll ever need. One good place to start is The Bogleheads Guide to Investing.

The next step is to connect this information to your finances. Many guides to insurance (like the one linked above) will walk you through this process and help you figure out what types and values of insurance you might need.

After that, it’s merely a matter of shopping around for quotes. You can certainly get quotes from local agents, but with this info in hand, you can also get quotes directly from insurance houses.

The more options you have for shopping around, the more money you can potentially save. It’s a customer’s world out there and you deserve to be taking advantage of it.

This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. 

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